The next year is likely to be better for mutual fund industry on the back of growth recovery seen in key developed markets like US, Europe and Japan along with expectations of monetary easing by the central bank.

“We are witnessing consistent signs of improvement in US, Euro and Japan..this will help in companies of those countries to look at investment in emerging economies, which will help Indian market...Also, if rate cut happens by the central bank next year, there will be fund flow into debt schemes,” IDBI MF Chief Executive Officer Debashish Mallick told PTI in an interaction here.

He also said the FIIs are also building up expectations of a stable government irrespective of party affiliations post general elections, which is likely to boost domestic growth prospects.

Mallick also said there are expectations that a stable government will be formed post general elections, which will support the market, eventually attracting more retail investors into equity mutual fund schemes.

At the end of November 30, total assets under management of mutual funds rose to Rs 8.9 lakh crore from Rs 7.01 lakh crore as on March 31, 2013.

According to an estimate, mutual funds have lost over 20 lakh investors, measured in terms of individual accounts or folios, in the first seven months of the current fiscal (2013-14).

Referring to impact of US Fed’s reduction in bond buying programme by $ 10 billion on domestic market, Mallick said the impact would be less as compared to July as foreign reserve position is a lot better along with current account deficit situation.

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